Real estate suitable for condominium development is also suitable for single-family home development. Therefore, a rise in the price of condominiums relative to single-family homes tends to
A) increase the opportunity cost of building new single-family homes.
B) reduce the demand for condominiums.
C) increase the demand for condominiums.
D) do none of the above.
A
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Automatic stabilizers stabilize the level of real GDP because:
A. Congress quickly changes spending and tax revenue. B. federal expenditures and tax revenues change as the level of real GDP changes. C. the spending and tax multiplier are constant. D. wages are controlled by the minimum wage law.
Suppose Country A, a relatively capital-abundant country, experiences further expansion in its endowment of capital. Explain how this might affect its volume (amount) of trade and its terms of trade with the rest of the world. Under what conditions (if any) would the economic well-being of Country A decline after the increase in its capital endowment?
What will be an ideal response?